Wednesday April 16, 2025
Mogadishu (HOL) — Somalia's Ambassador to the United States, Dahir Hassan Arab, announced on Tuesday that the country is officially open for oil drilling and exploration, inviting U.S. energy companies to re-engage in Somalia's hydrocarbon sector.
In a post on social media platform X, Ambassador Arab wrote, "Proud to announce that Somalia is officially open for drilling. I invite U.S. energy companies to return. SSC-Khaatumo is now recognized as a Federal Member State and the lifting of force majeure clears the way for oil exploration & extraction in the resource-rich Nugaal Valley Basin."
The announcement follows the formal recognition of the SSC-Khaatumo administration as a federal member state by the federal government of Somalia. The move, declared by Prime Minister Hamza Abdi Barre during a visit to Las Anod on Sunday, brings SSC-Khaatumo and existing member states into Somalia's federal framework. The new recognition of SSC-Khaatumo and inclusion in federal governance structures may help resolve past disputes over resource control in the area.
With SSC-Khaatumo now recognized and lifting force majeure restrictions—previously imposed due to insecurity—Somalia is moving to revive its petroleum exploration ambitions, particularly in the Nugaal Valley, a region believed to hold significant untapped oil and gas reserves.
Successive Somali Ministers of Petroleum and Mineral Resources have repeatedly stated that the country is open to international investment. Still, security concerns and legal uncertainties over federal and regional jurisdiction have hampered progress.
Former Petroleum Minister Abdirizak Omar Mohamed stated in early 2024 that offshore drilling would begin before the year's end in waters near Hobyo, located in the central Mudug region. In October 2024, the Turkish survey ship Oruc Reis arrived off the coast of Mogadishu to begin seismic exploration following the signing of an energy cooperation agreement between Somalia and Turkey.
While offshore areas hold immediate promise, Somalia's onshore reserves also show promise. Among them is the Holhol block, located in the Xuddun district of the Sool region. Formerly known as the Nugaal block, Holhol was first identified as a prospective site by British colonial geologists in the 1930s.
Later exploration by Range Resources and Horn Petroleum concluded that Holhol's geology closely resembles oil-bearing basins in northern Yemen, which hold over one billion barrels of oil. The Holhol block spans roughly 21,784 square kilometres and may contain up to 20 billion barrels of oil, according to geologists.
Although the Holhol block is not part of current offshore agreements with Turkey, it remains central to Somalia's onshore energy ambitions. Former government officials included Holhol in investment presentations in 2024.
Optimistic estimates of Somalia's total oil reserves could be as high as 110 billion barrels, based on a 2012 study by the Routledge Institute. At current market prices—$77.27 per barrel—this would value Somalia's reserves at approximately $8.5 trillion.
Somalia's oil exploration history dates back to the 1950s when companies like Agip and Sinclair Oil Corporation began early surveys. Activity peaked in the late 1980s but collapsed in 1991 after the fall of the Siad Barre regime. Four major American oil companies—Conoco, Amoco, Chevron, and Phillips—retained exploration contracts despite the civil war. Conoco even maintained a presence in Mogadishu and later handed over its offices to the U.S. government for humanitarian use.
Prime Minister Barre also formally invited SSC-Khaatumo leader Abdikhadir Ahmed Aw-Ali Firdhiye to attend the upcoming National Consultative Council (NCC) meeting scheduled for May 1–2 in Mogadishu. The NCC brings federal and regional leaders together to deliberate on national priorities, including resource management, security coordination, and constitutional reform.
Energy analysts warn that for Somalia to avoid the 'resource curse,' it must resolve internal political disputes and implement a fair and transparent revenue-sharing model.
- With files from the BBC Somali Service
Editor’s Note:
This article has been updated to provide additional context and verified historical background on Somalia’s petroleum sector. The original version focused primarily on the recent announcement by Somalia’s ambassador to the U.S. and the federal government’s recognition of SSC-Khaatumo as a federal member state.